Low Mortgage Rates Make it a Good Time to Buy

With mortgage rates at a 30 year historic low, the Wall Street Journal is suggesting now is the best time to buy. Ken Rosen of the U.C. Berkeley Fischer Center for Real Estate said that mortgage rates will be much higher five years from now, and to take advantage of the current low rates.

The Wall Street Journal video below elaborates:

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How would a government shutdown affect the mortgage business?

The last time we went through a government shutdown in 1995, it was a pain, but not a panic. I can assure you my company has prepared all loans in our pipeline and are looking at new contracts not yet acquired for a worst case scenario, so the disruption will be minimal. If a shutdown would occur, these would be the top six areas that can affect us during a government shutdown:

FHA Case Numbers: For each FHA loan, we are required to order a FHA case number. This number is generated before an appraisal can even be ordered. With a shutdown, we may not be able to order case numbers. Because of this, it is critical to let us know if there is a contract executed on any loan, so that our office can go ahead and order a case number without risking the loan being on hold during a shutdown. Note: with the new FHA guidelines, a contract must be executed before a case number can be ordered.

The ability to close FHA loans is questionable, depending if HUD keeps its website running to obtain FHA case numbers and CAIVRS (During the November 1995 shutdown, case numbers could not be obtained, but this was prior to the internet and was a manual process). The shutdown in 1995 mainly caused a delay rather than a drop in FHA loan origination, but if lenders decide to stop accepting FHA applications, it could be a problem. I think we will see delays but not a complete shutdown of the FHA.

4506 IRS Transcripts: Each loan requires the verification of at least one tax return by the IRS to verify the numbers that each customer presents us on their tax returns. During a shutdown, this process would be delayed as the IRS wouldn’t be at work to verify the transcripts.

Verifying Employment of a Government Employee: We are required to verify the employment of each customer. If the customer is a federal government employee, we would be unable to verify his or her employment during a shutdown.

FEMA: Homes in a Flood Zone: Homes that are determined to be in a flood zone would not be able to close as flood insurance could not be obtained.

USDA: During a shutdown, the USDA office would be closed because they have government underwriters that insure behind the lender. With a shutdown, we would see delays with all USDA loans.

VA: Like the FHA, the disruption is possible -- but not absolute -- during a shutdown. This would all depend on if they continued to allow their website to function. A disruption would cause delays in VA appraisals and the issuing of certificates of eligibility. If the website was closed during a shutdown, we would see delays in all VA loans.

We are committed to you and all of our homebuyers. Stay tuned for updates in this very important time period.

Creative Ways to Retire Without Savings

Like many baby-boomers today, you may be faced with an upcoming retirement and a lack of a retirement savings account due to the rough economic times of the past few years.

A recent CBS MoneyWatch article tackles this problem by suggesting resourceful ways to make retirement work for you.

One bold idea is to pair up with another married, retiring couple, pooling together Social Security income for a manageable budget. Social Security income at age 66 will be $2,000 per month, with an additional $1,000 per month for the spouse, resulting in a $36,000 per year income.

If you find a like minded couple, consider moving into a three bedroom house together, making the combined household income $72,000. This is higher than the 2009 national average income.

Another tactic is to delay retirement until age 70, in which case your monthly Social Security income will increase to $2,640 per month. In this situation, your spouse would not need to delay past age 66 to receive the $1,000 per month. “You’d want to file and suspend your Social Security income at age 66, so your spouse can start the $1,000 monthly spousal benefit income at age 66,” advised the article.

At age 70, your combined income would be $43,680 per year following this plan. If you were to pair up with another married couple, that Social Security income would increase to $87,360 per year.

Your circumstances may not be right for such an arrangement, but this is just one example of creative and resourceful ways to head into retirement in this economic climate.

Staging Your Home For Sale

Home staging is important factor in selling your home, especially in a competitive market. A well-staged home can make the difference between a quick sale and a long, arduous process.

While you can hire professionals to stage your home, you can save money by doing it yourself. In the video below, an award-winning home staging professional gives tips and advice.